hbo

Succession

I’ve been keenly awaiting Succession for a while. It comes from Jesse Armstrong who created Peep Show and more recently has done a lot of work with Armando Ianucci on things like The Thick of It and Veep, the latter being from HBO as this is.

What’s interesting is that, simplistically, this is a fictionalised version of the Murdoch family, with a powerful patriarch and his squabbling offspring. And of course, Sky Atlantic, who have an output deal with HBO giving them rights to much of the company’s programming, are in a large part owned by the Murdochs. Indeed right now there’s a complicated chain of acquisitions going on with Disney buying Fox, including its Sky assets, while Comcast tries to buy Sky and sneak it out of Disney’s hands.

I was initially surprised when this big budget drama didn’t instantly appear on Sky Atlantic. Surely they weren’t having cold feet about it? 

It turned out that Sky Atlantic wanted to put the whole series out in one go, so they waited until the end of its US transmission and all the episodes were available. And more to the point, although the series has the venere of being about the Murdochs, it’s somewhat more than that.

As an aside, it was entertaining hearing Matthew Macfayden on The One Show earlier this week, explaining that in the US there were a number of media families.

This is all true, but the Roy family is remarkably similar in structure to the Murdochs. At the head of the family is Brian Cox as Logan Roy – a cracking role. As with Murdoch, he originates from the ‘colonies.’ Scotland in this instance. He’s showing signs of age, and some of his children question some of his decision making. His heir apparent, is Kendall Roy (Jeremy Strong), the most business focused of the children. The eldest son, Connor (Alan Ruck) is a free-spririted libertarian, spending his time on a farm, not doing a great deal apart from overseeing the company’s annual fundraising gala dinner, and living with sort-of-girlfriend, who he’s sort-of-paying to be his sort-of-girlfriend.

Roman Roy (Keiran Culkin) is a waster who spends his time not taking anything too seriously, but it does mean he gets all the zingers. He’s only really in the business because he’s a son and therefore part of the family. Shiv (Sarah Snook) is the one family member trying to fashion her own career as a political consultant. But she’s still close. Her husband to be is the charmless social climber Tom (fantastically played by Matthew Macfayden), who knows he’s marrying into wealth… and power.

And then there’s Marcia (Hiam Abbas), Logan’s third wife, who’s mysterious background tends to make you wonder if she’s all she seems. 

Waystar Royco, the business that everything revolves around seems to have a publishing arm, a TV arm (including a news channel), a movie studio and a theme park business – the latter being the only bit that Murdoch doesn’t really have.

Given all this, how can anyone possibly equate Logan with Rupert, Kendall and Roman with James and Lachlan, Shiv with Elisabeth, and Marcia with Wendi Deng/Jerry Hall?

In fact, despite the similarities in the familial structures, the series goes off in some slightly different directions. The tone is, for the most part, surprisingly light. This is a soapy cousin of Veep, with many of the cast being caricatures to an extent. Culkin and Macfayden both get to have a lot of fun with their characters, as does Nicholas Braun who plays the dim-witted great nephew of Logan, and being pushed into the family business by his mother. There’s a fantastic scene when Tom takes him on a night out and they end up in a nightclub where Tom steers them up into an exclusive, and entirely empty, VIP section. Learning as he goes, he wonders allowed if it’s sort of like the rest of the nightclub, but without all the fun stuff on the dance floor down below. They sit there drinking from their $2000 bottle of vodka in silence.

But this isn’t solely a comedy, and there are serious questions being asked at times. I won’t spoil the season ending, but it’s played out remarkably well. 

In the end, this is a family drama with set amongst a particularly dysfunctional family. Yes, the setting is all sleek corporate offices and palatial apartments; private helicopters and glossy functions. But they’re the same kinds of rows, just played at a higher order.

I was hooked and can’t wait for season 2 next year.

Platform Exclusives

On Monday, Game of Thrones finished its fifth series run on Sky Atlantic with an explosive episode. Don’t worry, you won’t find any spoilers on this site (Unlike certain news sites). Anyone who wanted to, could watch it on Sky Atlantic.

Well, up to a point Lord Copper.

If you’re a Virgin Media customer, then you don’t get Sky Atlantic. Sky sees the channel as a point of difference between it’s own platforms and others. So while Sky One and Sky Living are offered to third parties like Virgin Media, Sky Atlantic is held back.

You can, as of Tuesday this week, legally access that entire fifth series of Game of Thrones via platforms like iTunes, Amazon Instant Video or Google Play. But obviously that’ll cost you.

Also this week came the announcement that AMC Networks is launching a UK offering, but that it’ll be exclusively available via BT TV on YouView. AMC in the US has been home of series such as Breaking Bad, and its spin-off Better Call Saul, Mad Men and The Walking Dead.

But who broadcasts those shows in the UK can vary quite a lot. The new Channel 4 Sunday night series, Humans, is an AMC co-production. The Walking Dead, which is the biggest drama in the US, goes out on Fox TV in the UK, with Channel 5 having had second run rights. Mad Men went out on Sky Atlantic having been poached from BBC Two in the UK, and Breaking Bad and its spin-off are on Netflix (although Breaking Bad is also now on free-to-air Spike). Other AMC shows can be found on Amazon too.

What’s interesting about this deal with BT is that they’ll have exclusive access to Fear the Walking Dead – a new spin-off series set in the same world as The Walking Dead. And to watch it, you’ll need new hardware. BT is seemingly trying beef up its non-sport TV portfolio.

Of course AMC now owns a near 50% stake of BBC America, and this means that you’d anticipate some BBC co-productions down the line between the two broadcasters – John Le Carré’s The Night Porter with Hugh Laurie and Tom Hiddleston seems like a good example of this (although I believe this was presented to both parties by a third party who put the package together).

So how this will all fit together with regard to BT-exclusive access to AMC programming in the longer term remains to be seen. However it should be noted that despite the Sky/HBO deal, there are still instances where, say, the BBC does a deal with HBO and Sky is cut-out – The Casual Vacancy being a recent example.

But what this clearly means is that viewers are going to be faced with some hard choices.

At the moment, should I want to watch Game of Thrones, Daredevil and Transparent, I can do one of three things (or a mix of them).

– Subscribe, respectively, to Sky Atlantic (via Sky or Now TV), Netflix and Amazon Prime
– Wait until they become available through DVD/digital
– Pirate them

(I’m not advocating the third, incidentally).

Assuming I’m a Walking Dead fan who also wants to watch the other series, at least until now I could access to the OTT services through an inexpensive one-off purchase of a Google Chromecast, Now TV, Roku or Apple TV box. To see the Walking Dead spin-off, I’m going to need a full-on BT TV subscription and one of their boxes. Or I’ll have to wait until the DVD/digital downloads are made available.

This is where it gets even more complicated.

At the moment, most of these productions are actually owned by third party companies, and they simply licence their output for specific windows to services like Netflix or Amazon. But that has meant that when Netflix launched in France, they had to do so without House of Cards, because it had been licenced to another channel. That’s also why DVDs/downloads are made available of the series in due course – the studio that owns them distributes the DVDs and earns revenues from them – not Netflix. House of Cards tends to be exclusive to Netflix for about six months before the DVD/download option becomes available.

Netflix in future says it wants to own as much of its own programming as possible. In other words, it wants to close off those avenues, or at least have control of them. Holding back programming could make long-term sense in platform building, even if it leaves money on the table in the short term.

In the meantime, I’m not sure that this deal on its own is enough to make a compelling case for anyone to cancel Sky and take up BT TV – as it hasn’t been with their sports rights so far. But I can see some of those AMC catalogue programmes disappearing from Amazon in due course, and I can also imagine that there’ll be a significant amount of piracy surrounding Fear the Walking Dead when fans realise that they need a whole different subscription to watch it legally, unless they’re prepared to wait for the DVDs/downloads.

Unbundling HBO

I find it really interesting what was announced today by HBO. Essentially from some indeterminate point next, HBO will sell a service direct via the web.

Now in a world where we have Netflix and iTunes, this might not seem like a big move, but the pay TV market – and the American one in particular – is an interesting beast. HBO is a premium cable channel. That is, you buy it via a cable or satellite operator. But those operators will only it sell it to you in addition to a basic cable package. In other words, even if you only want to watch HBO, you have to take a big package of channels to be able to subscribe.

The US isn’t alone in this. It’s the same way that Sky and Virgin Media retail their channels. You take some kind of basic package, and then you can add, say, Sky Sports on top of that. The difference is that “basic” cable packages in the US tend to be bigger. And the US equivalent of Sky Sports, ESPN, tends to be included in that basic package. ESPN, incidentally, gets a decent chunk of your cable bill – probably somewhere around $6 a month. They use that pay for their sports rights. But before you say, “Wow – $6 a month is pretty cheap,” you need to think about the economics. It’s only that “cheap” because every customer is effectively forced to pay for it. If you’re not interested in sport at all, you’re still paying $6 a month for sport. If it was an add-on, then fewer than the 100m+ households that take cable (or satellite) would pay it. The costs would remain the same, so the price would go up. That’s why in the UK we have to pay £24+ a month for our Sky Sports package.

There’s a lot of talk in the US about “cord cutters” – those who don’t want to have to buy a full $80 a month cable TV package. They still want to watch Game of Thrones at the same time as everyone else though. So it’s a question of how they get it.

Many channels of course provide what the industry terms Over the Top (OTT) services. But these services tend to be within the walled gardens of the cable TV operators. It’s obviously not in cable TV comapnies’ interests to let that programming just swim around free. Indeed, they don’t really like letting customers pay for it on their own. If we can all start just buying the shows we want, then why should we have to pay for dozens of channels we don’t want? That ecosystem does support a broad range of channels. But it’s arguably propping them up too. You’re paying perhaps only a few cents a month for a channel, but that makes it profitable.

So OTT services like HBO’s HBOGo work hand in glove with your cable supplier. You have to enter your subscriber details to get access to the service. Typical you’ll be limited to a small number of devices to prevent you giving out your details to all and sundry. Although that doesn’t stop lots of kids who moved away from home using their parents’ cable bills to get their HBO. The so-called “millennials” are particularly likely to do this.

Ironically there’s also the problem that it’s those same cable TV companies that are about the only place you can get internet connectivity in the US. It makes them effective monopoly suppliers, and even triple-play phone/broadband/TV packages are still vastly more expensive than in territories where true competition exists, such as the UK.

But time marches on, and cables are being cut, although probably not to the extent that is sometimes portrayed.

And viewers still want to watch Game of Thrones regardless of whether they have cable or not. A campaign called “Take My Money HBO” was even launched.

Well it sounds like they’re now going to do it. And this is where it gets interesting. HBO is an enormously profitable part of Time Warner. Once upon a time, Time Warner also owned a big cable operation, but Time Warner Cable was spun off in 2009. Today Time Warner’s big divisions are Turner (including basic cable TV channels such as TNT, TBS, and the CNN stable), Warner studios (the movie and TV production divisions), and HBO.

HBO itself is enormously successful. In the 2013 Annual Report, it saw revenues of nearly $5bn – a combination of subscription fees and content sales (sales of programmes to non-HBO owned channels, and home video revenues). That generates about $1.8bn of Operating Income. But the Turner division generates nearly $10bn revenues and an Operating Income of $3.5bn. So in other words, there’s a sizeable chunk of business still being done in the cable TV market.

That’s important because of the potential ramifications that annoying cable operators could have. Could we see consumers cutting the cord and just buying HBO?

I suspect that while some will, it won’t be all that many.

There’s a lot of good TV these days, but it’s spread thinly over many channels. I got very excited about the forthcoming new series of Twin Peaks the other day. But that will be on HBO’s premium cable rival, Showtime (owned by CBS). Customers who cut the cord and want to watch Homeland or Twin Peaks will need to subscribe to a similar service from Showtime – assuming they make one available.

Then there’s the cost.

Looking at what HBO tells us about their revenues, based on the 2013 Annual Report, it turns over $4.231bn in subscription revenues. Now the report doesn’t break that out by territory, and there are other versions of HBO around the world. But it does note that HBO Nordic and HBO Asia combined have subscription revenues of around $48m. I’ve plucked $50m additional revenues from other territories out of the air. But to be honest, even if I’m $30m out, it doesn’t make much odds to the maths.

We’re left with $4.133bn for US subscription revenues.

According to this Variety piece, SNL Kagan (a company who model these things closely) say that HBO has 29.2m customers.

So if you divide $4.133bn by 29.2m and then by 12 months, you get a cable bill for HBO of $11.80. And that sounds right. This piece from last year has a range of prices for HBO broadly between $15 and $20 a month. But there are lots of offers, bundles and other things. Plus there’s almost certainly a cable company mark-up. So $11.80 feels right.

Interestingly, an Atlantic piece from 2012 suggested it was $7. I suspect, even allowing for a couple of years of Game of Thrones, that this was low.

What this all says to me is that consumers can be looking at something more like $20 a month when the new service launches.

This will appease cable operators who can say, “Hey, HBO is cheaper with us.” And yes, it’s at a premium compared to what Netflix charges, or Amazon Prime’s implied cost (Amazon did a big $100m+ deal for older HBO programming recently), but it’s not out of the ballpark. There are 70m cable households not currently paying for HBO. And even if some of them only subscribe for limited periods – the ten weeks of Game of Thrones – then it could make sense for all concerned. Yet another reason why those Game of Thrones DVDs take such a long time to get released.

I’m not sure that there are many other companies who could do this. HBO revenues aren’t related to advertising, and cable companies can’t get too annoyed and pull HBO. If they did, then they’d simply lose customers. It’s certainly an interesting move!

This whole piece is probably a bit academic for a UK audience. But it’s interesting that Sky is effectively already doing this same thing with Now TV. £9.99 for a day’s sport is a rip-off compared to £24 a month. But £10.99 for the Ryder Cup weekend might be something of a bargain.

Viewing Habits

On the train home this evening, I noticed an outdoor advertisement for Sky Atlantic’s big new series, True Detective. So I posted this on Twitter:

Now I was a being a tad disingenuous as I do know (or at least think I know) the answer to my question. But a few people engaged in conversation, so I thought it might be worth elaborating a little and discussing things more broadly.

In some respects there is the simple answer in that expecting people to remember a date and time is pointless in today’s 24/7 world. I can go home and Google it. Sky emails me weekly and has told me about it. If I go into the On Demand section on my Sky box, it’s already there waiting for me to preview it.

Then after it has aired, the show will get lots of repeat opportunities across the week. And it’ll stay available on demand for box-set style catch-up opportunities.

So in that respect, giving me a date and time – the traditional way of doing things – isn’t necessary.

Then again, look at the promotional activity surrounding the upcoming fourth season of Game of Thrones. It’s all about the date.

That’s because the shows do two different things. Game of Thrones gets audiences that are probably bigger than any other show on the channel. It’s also the most pirated show in the world.

Whereas True Detective isn’t going to be a mass crowd pleaser. HBO who make both shows understand this. And so does Sky. HBO simply has to keep making shows that prevent subscribers cancelling the premium channel, or make them want to subscribe to it. Actual viewing figures don’t matter. Sure, you’d think one would drive the other. But that’s not always the case. It’s a bit like buying a book or an album that you think you should read or listen to, but never quite get on. It doesn’t matter. You’re part of the in-crowd.

In fact, True Detective isn’t an easy-to-watch programme. If you’re in the habit of sitting with a tablet on social media while you watch TV, then you’re not going to get a lot out of this. But it does come with two mega-stars in Matthew McConaughey and Woody Harrelson. So in fact the show is getting a massive marketing push because it’s the kind of show you should be watching – even if you don’t.

And given that Sky Atlantic is exclusive to the Sky platform, it’s another reason to be with Sky and not Virgin Media.

How do I know this? Because it’s going out on Saturday nights. Yes BBC Four has made a virtue of using this night for dramas, but there’s no way that True Detective will get more than a couple of hundred thousand going out at 9.00pm on Saturdays up against the big entertainment shows on BBC1 and ITV.

The other big programme at the moment, with Hollywood star quality is of course the second series of House of Cards on Netflix. Is this the future of television? All thirteen episodes available in one go from last Friday? Superb acting, writing and production?

Well yes. But also no.

House of Cards is superb. The cast is exceptional, and the second series begins with a bang (No spoilers, but I remember the original series. I also watched this the same day I watched the first episode of the second series of Line of Duty).

The question I’ve got to ask is this – how long can Netflix keep up its batting average?

So far you can just about name every series that Netflix is 100% responsible for. In some instances, they’ve “saved” broadcast shows like Arrested Development and The Killing. In other cases they’ve commissioned new series like Orange is the New Black (still to get into this, although I hear John Plunkett likes it) or the less well received Hemlock Grove.

So far, they’ve mostly done really well. But just because you have the cash to hand, and have allowed producers more creative freedom than certainly US broadcast networks offer, is that enough to “guarantee” hits? Well no. Netflix hasn’t had a big flop yet – although they keep streaming figures a closely guarded secret – but it’s inevitable. Compare and contrast with the film business. Even arthouse studios aspire to make every film the best possible, but as we well know, that’s not possible.

The real problem is that it’s one thing commissioning two series – 26 episodes – up front for $100m and getting a hit. What happens if the series fails spectacularly?

What’s clear in both the case of HBO and Netflix shows – it’s near impossible to discuss them in the workplace because no longer is everyone at the same place.

And on that, can I just ask nobody tells me what happens in Breaking Bad, as I’m only two episodes into the first series…